Berkshire Hathaway executives tour Shlomo Group operations
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Executives from U.S. investor Warren Buffet’s Berkshire Hathaway toured the operations of Shlomo Group about two weeks ago and met with its top managers. Berkshire executives visited the group’s Afcon Holdings unit, a publicly traded maker of electromechanical and control systems, and the group’s giant automotive logistic center in Tzrifin. No agreements were reached about buying shares in Shlomo Group – a closely held company controlled by Shlomo Shmeltzer – were reached, but the two sides are exploring cooperative agreements. Berkshire executives are believed to have met with other companies in Israel as well. Berkshire’s sole Israeli holding is the machine tools maker Iscar.
Delek Drilling, Avner readying $2b bond sale
Delek Drilling and Avner, the two Delek Group units that own stakes in the Leviathan, Tamar and Yam Thetis offshore gas fields, are readying a giant $2 billion bond sale overseas in the middle of March 2014. The two partnerships are awaiting credit ratings from Moody’s and Standard & Poor’s, and expect to begin a roadshow at the beginning of the month. The proceeds will be used to repay some $900 million in loans taken from a bank consortium two years ago, another $500 million to $750 million for helping finance development of Leviathan, and the remainder used to pay a divided. Leviathan’s development is now expected to move ahead after Australia’s Woodside Energy reached an agreement with the partners to take a 25% stake in the field. JPMorgan and Citigroup are leading the sale.
Some economists tip Bank of Israel to cut base rate for March
Several economists expect the Bank of Israel to lower its base lending rate on Monday by a quarter of a point, to 0.75% for March. If the bank acts, it will be first rate reduction since last September, and bring the rate to its lowest since November 2009. Most economists are forecasting no change, but those predicting a rate cut cite a drop in consumer prices last month and an outlook for inflation of just 1.4% over the next 12 months (at the low end of the government’s inflation target of 1% to 3%). They also note economic growth to an annualized 2.8% in the second half of 2014. Arguing against a rate cut are concerns that it would encourage home prices to continue rising by making mortgages cheaper.
Trajtenberg cleared as central bank deputy chief
Israel’s cabinet approved Nadine Baudot-Trajtenberg as deputy governor of the Bank of Israel, the central bank said yesterday. Baudot-Trajtenberg, who was nominated by Governor Karnit Flug last month, will serve as a member of the bank’s monetary policy committee – which sets interest rates – and its supervisory council. Baudot-Trajtenberg had been deputy dean at the IDC Herzliya’s School of Economics since 2010. Most of her experience was at Bank Hapoalim, which she joined in 1987. With Baudot-Trajtenberg’s appointment, the Bank of Israel’s two top officials will be women and the monetary policy committee will revert back to its normal six-person panel. Since July, Israel’s MPC has been operating with five members. She will begin her term March 2
Tel Aviv shares mixed in very light trading
Tel Aviv shares ended mixed on especially light trading yesterday. The benchmark TA-25 index fell 0.15% to a close of 1,321.68, while the broader TA-100 edged 0.06% higher to 1,226.10 on turnover of 485 million shekels ($138 million). “Shares traded in the domestic market are trading at fair valuations, although some sectors are starting to look expensive,” said Halman Aldubi. “Low interest rates and economic growth are expected to support the market.” Ashtrom Properties rose 2.1% to 9.72 shekels after it reported a sharp rise in Q4 2013 net profit to 87.8 million shekels. Teva Pharmaceuticals ended down 0.6% at 168.40 shekels after a five-day rally, spurred by speculation it might be an acquisition target amid a spate of mergers and acquisition deals. In the fixed-income market, the government’s shekel bond for 10 years rose 0.15% to reduce its yield to 3.4%, while its inflation-indexed bond for the same term climbed 0.14% to a yield of 1.32%.